Deutsche Telekom's €560 Million Buyback and Drone Defense Push Can't Lift Stock from Near-Year Low
Published on 07/04/2026 at 15:46 | Redaktion boerse-global.de
The German telecoms giant finds itself in a peculiar tug-of-war. Its stock has shed over a quarter of its value since February, yet two major investment houses see material upside while the company plows ahead with a multi-billion-euro buyback and branches out into drone defense. The market, it seems, is not yet buying the bull case.
Shares closed Friday at €25.20, marking a 4.22% weekly decline and leaving them 26.64% below the 52-week high of €34.35 touched in February. Over the past twelve months, the stock has lost 18.76%. A brief relief rally from the year's trough of €23.54 at the end of June has stalled out, with the current price just 7.05% above that floor.
Two Analysts, Two Slightly Different Outlooks
UBS has been one of the most vocal defenders of the stock. Analysts at the Swiss bank describe the recent selloff as an overreaction, reiterating their "Buy" rating and a price target of €36.60 — a potential return of roughly 45% from current levels. They point to double-digit earnings growth, a dividend yield of around 4.4%, and the ongoing buyback program as key supports.
Barclays Capital, meanwhile, trimmed its target on July 2 from €39.50 to €36.50, but maintained an "Overweight" rating. The cut reflects a more cautious view on the competitive landscape in the United States, rising threats from satellite broadband players like Charter Communications, and the complications around a potential full merger with T-Mobile US. Still, Barclays believes the worst-case scenarios are already baked into the price.
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Buyback Momentum and Internal Reshuffle
The timing of the analyst recalibrations coincides with the launch of the third tranche of Deutsche Telekom's buyback program. Starting July 1, the company will repurchase up to €560 million of its own shares through the Frankfurt Stock Exchange by the end of September. That brings the total programme — which runs through end-2026 and has a volume of up to €2 billion — past the halfway mark. The first two tranches already absorbed roughly €1.01 billion in stock, and the group has bought back 18.6 million shares year-to-date. Most of those will be cancelled, with a smaller portion reserved for employee compensation.
In a separate move, the group installed Dr. Uwe Heckert as the new CEO of its consulting subsidiary Detecon, replacing Jürgen Schäfer who left at his own request. Detecon advises clients on digital transformation, and the change is designed to make the unit more agile in a fast-shifting market.
Merger Fears and the Satellite Question
Much of the recent pressure stems from speculation that Deutsche Telekom may pursue a full merger with its US arm, T-Mobile US, of which it already owns roughly 54% and holds operational control. UBS dismisses the need for such a move, noting that the current structure already allows effective oversight. Moreover, the German government retains a 28.6% stake in Deutsche Telekom, making a complete political and regulatory integration with T-Mobile US a complex endeavour.
On the satellite threat, UBS views it as complementary rather than existential. The bank argues that satellite-based mobile services will not displace traditional cellular networks in the near term.
Diversification into Defence and Fiber
Beyond the core telecom business, Deutsche Telekom is quietly building new revenue streams. Together with arms maker Rheinmetall, it has developed a drone defense system for critical infrastructure. The technology uses the existing mobile network for high-frequency detection of airborne objects, while Rheinmetall supplies laser systems and intercept drones. The Bundeswehr University in Hamburg is also involved in the project — a clear sign that the operator is monetising its network for security applications.
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At home, the company is pressing ahead with its 4G and 5G rollout across 14 German states. In the Karlsruhe region alone, it plans to build 33 new sites and expand 113 existing ones by 2029. The fiber market is also shifting in Deutsche Telekom's favour: competitor "Unsere Grüne Glasfaser" recently pulled out of several districts in Siegburg after the incumbent announced its own plans there, handing the group market share in fixed-line infrastructure — albeit amid local concerns about reduced competition.
Charts and the Next Catalyst
The technical picture offers tentative signs of a floor. The Relative Strength Index stands at 36.9, a neutral-to-slightly-oversold reading. A "Bullish Harami" candlestick pattern appeared on July 1, which some traders interpret as a potential reversal signal. Still, the stock trades 8.49% below its 50-day moving average of €27.54 and 12.43% below the 200-day average of €28.78.
All eyes will turn to August 6, when Deutsche Telekom reports its second-quarter results. The numbers will provide fresh facts on operating momentum — and could determine whether the bullish analyst calls or the bearish chart pattern wins the day.
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